Takin’ Care of Business…
Before you start a new business, make sure to research what type and how much insurance you will need; as well as how much it will cost. Also find out what insurance is required by law in your state.
General liability insurance is a must for all new business ventures. Any enterprise can be sued. Customers may claim that the business caused them harm as the result of, for example, a defective product, an error in a service or disregard for another person’s property. Or a claimant may allege that the business created a hazardous environment. Liability insurance pays damages for which the business is found liable, up to the policy limits, as well as attorneys’ fees and other legal defense expenses. It also pays the medical bills of any people injured by, or on the premises of, the business. Liability policies include premises liability, for injury resulting from the business premises; medical payments, which pay out regardless of fault; fire legal liability, which will pay a landlord if you are liability for damage to the property you rent if there is a fire; and products and completed operations, which covers you if you are sued due to a defective product or completed project you provided an individual or business.
Property insurance will compensate a business for damage caused to property used in the operations of the business caused by a covered peril, such as a fire of theft. Property insurance covers not just a building or structure but also what insurers refer to as personal property, meaning office furnishings, inventory, raw materials, machinery, computers and other items vital to a business’s operations. Depending on the type of policy, property insurance may include coverage for equipment breakdown, removal of debris after a fire or other destructive event, some types of water damage and other losses. It may also provide operating funds during a period when the business is trying to get back on track after a catastrophic loss.
If you will have employees worker’s compensation insurance is required by law in California. Employers have a legal responsibility to keep the workplace safe, but accidents do happen! Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents. The cost of worker’s comp insurance varies depending on how risky a particular occupation can be.
Will you be purchasing new vehicles for your business? If so a commercial auto policy is a must! Limits of liability will go higher and you can even cover the vehicles you hire or your employees vehicles. Ask your agent if a business auto policy is necessary.
Not sure if you need professional liability (errors & omissions) insurance? Professionals are expected to have extensive technical knowledge and training in a particular area of expertise. If you fail to use the degree of skill expected of you, you can be held accountable in a court of law for financial harm you created an individual or business. Professional liability insurance is a separate policy from general liability insurance and can be much more expensive. Know this cost before starting your own business!
There are many more types of insurance and endorsements you can add to policies for more coverage to protect your business. Some examples include lost income coverage, loss of rents coverage if you are a landlord, utility interruption coverage, crop insurance for farmers, and many more that are specific to your type of operation!
Contact your agent today to review all your business insurance needs!